Category Archives: Law: Administrative Law

US personal tax returns are normally due on April 15; because the 15th fell on a Saturday this year, the IRS extended the date to April 18. That date got a lot of publicity. What got almost no publicity, however, is that Congress changed the date for filing the much more rare Reports of Foreign Bank and Financial Accounts (FBAR). The due date for the FBAR got moved from its usual date of June 30 to April 15 (or, this year, April 18).

The due date of FinCEN Report 114 (relating to Report of Foreign Bank and Financial Accounts) shall be April 15 [[Page 129 STAT. 459]] with a maximum extension for a 6-month period ending on October 15 and with provision for an extension under rules similar to the rules in Treas. Reg. section 1.6081-5. For any taxpayer required to file such Form for the first time, any penalty for failure to timely request for, or file, an extension, may be waived by the Secretary.

Whether there is some deeper purpose beyond tidiness at work here I leave to the tax lawyers. But if like me you have a foreign bank account (leftover in my case from a period working abroad) and have a tendency to file tax returns rather close to the deadline, you could easily miss the new earlier due date for reporting the foreign account’s existence. Never fear–Treasury has your back: even if this is not the first time you have been required to file an FBAR Treasury has unilaterally given you an automatic extension.

The new annual due date for filing Reports of Foreign Bank and Financial Accounts (FBAR) for foreign financial accounts is April 15. This date change was mandated by the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, Public Law 114-41 (the Act). Specifically, section 2006(b)(11) of the Act changes the FBAR due date to April 15 to coincide with the Federal income tax filing season. The Act also mandates a maximum six-month extension of the filing deadline. To implement the statute with minimal burden to the public and FinCEN, FinCEN will grant filers failing to meet the FBAR annual due date of April 15 an automatic extension to October 15 each year. Accordingly, specific requests for this extension are not required. (Please note: The due date for FBAR filings for foreign financial accounts maintained during calendar year 2016 is April 18, 2017, consistent with the Federal income tax due date.)

Although undoubtedly well-intentioned and useful (the agency likely has better things to do than to put many people unaware of the deadline change into violation and expend resources punishing them in some way) this is nonetheless a rather weird rule given the statute.

Agency regulatory power exists to the extent created by statute (or, perhaps and exceptionally, when deriving directly from inherent Presidential power). It follows, quite obviously, that agencies cannot act in opposition to a statute, for that would be not only arbitrary and capricious but ultra vires as well. Nor, we learned from Youngstown Sheet & Tube v. Sawyer (The Steel Seizure Case), 343 U.S. 579 (1952), can the President act in the teeth of a clear statutory command, save perhaps when applying an equally clear Constitutionally delegated power.

Some people argue that President Obama violated this basic principle when ordering ICE to deprioritize enforcement against certain classes of undocumented persons.1 But that was, in form and I would argue in substance as well, not a case of totally undermining the statute, but rather a Presidential decision to choose among priorities in a world in which it was clear resources were inadequate to fully enforce all the rules Congress had asked ICE to enforce. What is more, in form although perhaps not in substance, the Obama regulation did not require agents to refrain from deporting the favored classes of non-dangerous aliens; it merely suggested rather strongly that this would be a good idea.

Given this context, Treasury’s FBAR extension rule seems a little weird. There can be little doubt that the automatic deadline extension effectively not only undermines the statutory command that there be an earlier due date but in practice extends the former June 30 deadline to October 15. It does so by paying lip service to the deadline–it is officially April 15 (or 18)–but gives everyone effected an automatic extension whether or not they ask for one.

I think this may be too cute. But I also think it is unchallengable, since no one has standing to complain: the people affected by the rule are not harmed in any way, and nothing stops them from filing by the 18th if they want to. And no one else has a legal interest. Perhaps Congress could sue, as the House did over the Obama regulations, but the issue is far too trivial to merit that response.

It’s not unusual to see an agency rule that seems to go farther than a statute allows; such is the bread and butter of administrative-law-based challenges to regulations. It’s a lot stranger to see an administrative pronouncement that not only undermines a statutory command but in fact does the opposite.

Others find the use of public non-enforcement to be potentially legitimizing, see my colleague Leigh Osovsky’s The Case for Categorical Nonenforcement, 69 TAX L. REV. 73 (2015), (reviewed in JOTWELL: The Journal of Things We Like (Lots), Oct. 16, 2015). [↩]

As a long-time teacher of Administrative Law I’m continually amazed that people say Ad Law is dull. It may be complicated and sometimes verging on incoherent, but it’s not dull. And it really matters.

Only about 50% of law students nationally take Administrative Law (it is not on the bar exam in most states, although New York just added it), yet Administrative Law (and Accounting) are routinely among the courses that lawyers later say they regret not taking. Somehow this never comes up in ABA reform movements, perhaps because they are so dominated by litigators.

The undersigned individuals and organizations, concerned about the rule of law and the protection of Constitutional freedoms, hereby petition the National Security Agency to conduct a public rulemaking on the agency’s monitoring and collection of communications traffic within the United States. 5 U.S.C. § 553(e).

We believe that the NSA’s collection of domestic communications contravenes the First and Fourth Amendments to the United States Constitution, and violates several federal privacy laws, including the Privacy Act of 1974, and the Foreign Intelligence Surveillance Act of 1978 as amended.

The NSA’s collection of solely domestic communications, which has been acknowledged by the President, the Director of National Intelligence, and the Chair and Ranking Member of the Senate Select Committee on Intelligence, also constitutes a legislative rule that “substantively affects the public to a degree sufficient to implicate the policy interests animating notice-and-comment rulemaking” under the Administrative Procedure Act. EPIC v. DHS, 653 F.3d 1, 6 (D.C. Cir. 2011). Accordingly, the NSA’s collection of domestic communications, absent the opportunity for public comment, is unlawful.

We hereby petition the National Security Agency, a component of the Department of Defense, for relief. We ask the NSA to immediately suspend collection of solely domestic communications pending the completion of a public rulemaking as required by law.

We intend to renew our request each week until we receive your response.

Eye on Miami has a great letter from a citizen who tried to participate in state electric power rate-setting. Putting FPL on the spot should be required reading for anyone interested in energy law, state administrative law, or more general questions of public participation in government.

Here is just a small taste:

My first stop on my adventure was the public service hearing held in Sarasota on May 31, 2012. Here I first saw the most shocking thing about the public hearing process. In the lobby of the hearing site (Sarasota City Hall) were numerous FPL customer service representatives wearing FPL shirts who are greeting members of the public arriving to speak to the rate increase proposal. And FPL seems to have their own dedicated room. Which made no sense at all. It’s like a court hearing but one of the parties to the case gets to have their own room in the courthouse and a staff to lobby everyone, judges, jurors and the public as they walk by as to why their side is right. FPL also gets to have a table handing out literature. Nobody else gets to have a room or a table or representatives right outside the hearing room. There is no Audubon Society, no Environmental Defense Fund, no Florida Public Interest Research Group in the lobby lobbying (I guess that is where the term comes from!) against the rate increase or against the proposals or actions of FPL. The importance of this cannot be overstated. I had not yet intervened in the case but when I did subsequently intervene and speak from the stage as a party at the four Miami area public service hearings, I found that FPL gets a special room at every public hearing. They get to intercept members of the public who come to the hearings with complaints, before those members of the public enter the hearing room, and redirect them to the special FPL room and give them whatever it takes to “resolve their complaint”. The evidence indicates they are much more generous in achieving customer satisfaction in the special FPL rooms at the public hearings than they are in the normal course of their business. Essentially they run bribery rooms at every public hearing site with FPSC blessing.

POGO Study: Contractors Costing Government Twice as Much as In-House Workforce. This looks like an important study. The results are sadly not incredible: if you look not at the wages employees receive in the contracted-out businesses, but rather the prices their employers charge the government for their services, contracting-out looks (sometimes very) expensive compared to using government workers.

The U.S. government’s increasing reliance on contractors to do work traditionally done by federal employees is fueled by the belief that private industry can deliver services at a lower cost than in-house staff.

But a first-of-its-kind study released today by the Project On Government Oversight (POGO) busts that myth by showing that using contractors to perform services actually increases costs to taxpayers.

POGO’s new report is the first to compare the rate that contractors bill the federal government to the salaries and benefits of comparable federal employees. The study found that while federal government salaries are higher than private sector salaries, contractor billing rates average 83 percent more than what it would cost to do the work in-house.

The study comes with some caveats, but at first glance it looks like a serious attempt to measure things that — oddly — are not routinely measured by the government that pays for all this stuff.